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Letter Fius David Casa.Pdf Financial Intelligence Unit For the attention of the Director 26 April 2018 Dear Director, I wish to bring to your attention evidence of systemic money laundering by Pilatus Bank - an entity operating with a Maltese license and based in Malta. Pilatus Bank’s clients are predominantly Azeri politically exposed persons. In addition, the bank has been shown to launder money derived from corruption for top Maltese government officials. The bank’s AML violation have been described as ‘glaring’ and ‘deliberate’ in documents leaked from Malta’s anti-money laundering agency (the ‘FIAU’). Pilatus Bank applied for a banking licence with the Malta Financial Services Authority in December 2013. The licence was issued less than one month later, on 2 January 2014. A few months after the licence was issued, in May 2014, the United States Treasury Department issued a FinCEN advisory FIN-2014- A004. The notice alerted financial institutions worldwide to a pattern of Iranian nationals purchasing St Kitts & Nevis passports ‘in order to facilitate financial crime’. The owner of Pilatus Bank, Seyed Ali Sadr Hasheminejad, is an Iranian national who purchased a St Kitts & Nevis passport through Henley & Partners in 2009. The CEO of the bank, Hamidreza Ghanbari, is an Iranian national with a Dominican passport. The mother company of Pilatus Bank in Malta is Pilatus Capital Ltd, a UK company opened in 2008 by Mehdi Shamszadeh (a.k.a. Shams), an Iranian national who acquired British citizenship in 2011. Shamszadeh was sentenced to death in Iran following a conviction on charges of embezzlement of billions of dollars of public revenue while he was a director of the Islamic Republic of Iran Shipping Line, and while tasked with circumventing sanctions for his country’s Ministry of Oil. Pilatus Bank is central to the revelations in the Panama Papers. Investigative journalist Daphne Caruana Galizia reported extensively on Pilatus Bank and its links to corruption and money laundering. Daphne Caruana Galizia was assassinated on 16 October 2017. There is a growing body of evidence concerning the bank’s involvement in corruption and money laundering most of which originates from leaked analytical reports from Malta’s FIAU and now from the investigative work of the Daphne Project. It was noted in two of the leaked FIAU reports from 2016 that Seyed Ali Sadr Hasheminejad was being investigated for money laundering in another jurisdiction.1 It is now clear that that jurisdiction was the United States and the investigating authority was FinCEN. Mr Hasheminejad has now been arrested in the United States on charges of evading sanctions and money laundering and is facing a possible conviction of 125 years imprisonment in the United States.2 Leaked FIAU reports have also shown that Pilatus Bank was used on a number of occasions to launder money for persons at the highest levels of the Maltese government. In one instance involving Brian Tonna, then representative of Mossack Fonseca in Malta. The document shows that Pilatus Bank accounts were used to transfer illegal kickbacks from the sale of Maltese passports through the controversial citizenship-for-cash scheme. Kickbacks were transferred from Brian Tonna to Keith Schembri, the Prime Minister’s Chief of Staff.3 Brian Tonna is the architect of the money laundering structures created for Keith Schembri and Tourism Minister Konrad Mizzi that were exposed in the Panama Papers. Brian Tonna also set up similar money laundering structures for Mr Chen Cheng, who was responsible for negotiating the sale of a stake in Malta’s energy company, Enemalta, to Shanghai Electric together with Konrad Mizzi. A Pilatus Bank account was opened for the structure together with the indication that deposits would total €1 million at the end of a six month period that coincided with the time of the sale of the stake in Enemalta to Shanghai Electric for the sum of €320 million. In the most recent revelations of Daphne Project it has been shown that Pilatus Bank used 50 anonymous companies to make secret investments for member of the Azeri ruling family in the European Union and elsewhere.4 It has also been shown that ever since Daphne Caruana Galizia started her reporting in 2016 about half of the funds held by the bank (approximately €180 million) have been transferred elsewhere.5 It is clear that these funds possibly constituted the proceeds of criminal activity and their departure from Pilatus Bank makes it difficult for them to be retrieved by the competent authorities. The use of Pilatus Bank by top Maltese government officials for the purpose of money laundering and the fact that that it appears that limited action was taken by the Maltese authorities until after Hasheminejad’s arrest indicates a reluctance to ensure illicit funds are not returned to the respective UBO or laundered further. At present, the EBA is conducting a preliminary inquiry into Malta’s national supervisory authority (the ‘MFSA’) in view of that fact that Pilatus Bank was given a license and allowed to continue to operate 1 https://daphnecaruanagalizia.com/2017/05/read-three-financial-intelligence-analysis-unit-reports/ 2 https://www.irishtimes.com/business/financial-services/the-maltese-bank-and-the-shadowy-world-of-iran- sanctions-busting-1.3451443 3 https://daphnecaruanagalizia.com/2017/05/read-three-financial-intelligence-analysis-unit-reports/ 4 https://www.theguardian.com/world/2018/apr/23/azerbaijan-ruling-families-linked-to-secret-investments-via- maltese-bank 5 https://www.theguardian.com/politics/2018/apr/23/joseph-muscat-malta-political-career-lost-lustre despite the overwhelming evidence of the Bank’s involvement in criminal activity – most of which was in the public domain. The MFSA has now taken control over Pilatus Bank and lawyers for Mr Hasheminejad in the United States have indicated that that Pilatus Bank intends to start a process of winding down. Such a process would eventually involve the remaining funds (€126.9m) being transferred out of Pilatus Bank. In view of the above I am requesting an investigation into: • Purchases of assets in your jurisdiction with funds originating from Pilatus Bank; • Funds transferred through entities in your jurisdiction that originated from Pilatus Bank; • Any future transfers of funds of which you become aware that will originate from Pilatus Bank; • Transfers that involve Brian Tonna and his firm Nexia BT. Sincerely, David Casa MEP .
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